We recommend a buy in the stock of Aban Offshore from a short-term perspective. It is apparent from the charts of the stock that since peaking Rs 486 last October, the stock has been on an intermediate-term downtrend. Nevertheless, the stock found support at around Rs 260 in early March this year and stated to consolidate sideways between Rs 260 and Rs 300. Thereafter, the stock changed direction triggered by positive divergence in daily moving average convergence divergence indicators and weekly relative strength index.

On Tuesday, the stock jumped more than 12 per cent with extraordinary volumes, emphatically breaking through the key resistance as well as upper boundary of the sideways range at Rs 300. The stock is trading well above its 21- and 50-day moving averages. The daily RSI has entered the bullish zone from the neutral region and weekly RSI has entered the neutral region from the bearish zone. Both daily and weekly price rate of change indicators are hovering in the positive terrain implying buying interest.

We are bullish on the stock from a short-term horizon. We expect its rally to continue and reach our price target of Rs 322.5 or Rs 329 in the upcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 304 level.

( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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